IMO the compromises get pretty severe with a 700c frame smaller than 53 cm or so. Riders of typical proportion get to make a decision between lots of toe overlap or too much top tube when they spec 700c wheels on a small frame. IMO 650c is a great choice in the smaller sizes and brings everything back into proportion.
FWIW, toe overlap is something that can be gotten used to, but for the most part, I don't think it's something that should be. It is absolutely possible to build wondeful frames that do not have overlap, so to me it seems a bit of a cop-out when a framebuilder says "just get used to it, it's no big deal". I mean, it's possible to get used to brake squeal too, but brakes that don't squeal are very common, so why put up with it?